Umbrella Reinsurance
Definition of "Umbrella reinsurance"
Protection for all classes of business including automobile, fire, general liability, homeowners, multiple peril, burglary, and glass, by combining the contracts for these classes of business into one reinsurance contract. This enables the cedant to obtain reinsurance more cheaply, with greater capacity, and with greater spread of risk. An umbrella reinsurance contract is offered to one set of reinsurers who all take a fixed percentage of every treaty in the contract. One reinsurer may take 5% across the board, another may take 10%, and so on, until the umbrella contract is totally placed. All the treaties that compose the umbrella contract are written as one block of business; hence, the reinsurers are prohibited from choosing which treaty they want to reinsure. By combining all the reinsurance treaties into one contract, if a catastrophe loss results, each reinsurer will assume only a percentage of the loss instead of assuming the entire loss by itself.
Popular Insurance Terms
Insurance company representative who sells debit life insurance (industrial life insurance). This agent is usually more of a collector of small premium payments on a weekly, biweekly, or ...
Use of the threat of violence or actual violence in taking property from someone else's possession. This peril is covered on a personal basis through the purchase of a homeowners insurance ...
State-sponsored insurance fund that was intended to guarantee deposits at state-chartered savings institutions. A handful of these funds existed in the early 1980s, but after a string of ...
Right to insurable interest in property such as the right of a secured creditor in the property pledged as security. ...
Funds paid by an insurance company associated with the normal costs of doing business other than the costs of claims payments. ...
Common element in property insurance that excludes electrical damage or destruction of an appliance unless the damage is caused by a resultant fire. ...
Extremely aggressive behavior by an insurance agent to convince a prospect to purchase the insurance product without due regard for the prospect's ability to pay the premiums and/or needs ...
Coverage on more than one person that pays a benefit after all of the insureds die. This type of joint life policy is significantly cheaper than a regular policy. Survivorship life ...
Insurance coverages for businesses, commercial institutions, and professional organizations, as contrasted with personal insurance. ...
Have a question or comment?
We're here to help.